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Energy efficiency key to tackling global trilemma, says WEC

Improving energy efficiency is the key to balancing increasing global energy demand in an environmentally sustainable way

"Energy efficiency is at the heart of any solution for Europe and for our energy trilemma," said Maria van der Hoeven, the International Energy Agency's (IEA) executive director.

The World Energy Council (WEC) said the world has entered an energy trilemma in our need to balance equity - energy access and affordability - with security and sustainability. WEC said that to tackle this trilemma effectively, the energy industry must work with governments to develop sustainable, long-term, low-carbon energy policies. 

"There is a better path for developing and emerging economies than the traditional one which prioritised energy security and access, but neglected the environmental impact of industrial growth," Joan MacNaughton, executive chair of the WEC's World Energy Trilemma, told WEC Congress News in an interview. "Some countries have managed to grow - and at encouraging rates - and have brought electricity to their people without degrading the environment. The so-called 'hydro-powered' group of countries - the Brazils, the Uruguays - have used their own resources to chart a different path to sustainable development."

McNaughton added that this new path requires government to consult with industry at an early stage of the policy-making process; and for industry, in turn, to work closely with government.

The IEA categorises energy efficiency as a fuel in its own right. In the IEA's Energy Efficiency Market Report it said energy efficiency markets attracted investment of $300 billion in 2011. The investment was driven by sustained high oil prices, the agency said. In 2010 the IEA's 11 member countries avoided burning 1.5bn tonnes of oil equivalent thanks to efficiency improvements developed over the past 40 years, it said.

Turkey's energy demand has soared over the past decade as its economy remained robust throughout the European financial crisis. Turkey is focusing on energy efficiency projects which have allowed the country to save $8bn in fuel costs and plans to reinvest those savings into the country's energy sector. "(About) 890 million people below the equator use electricity equal to (the consumption of) New York. There is no equal access to electricity," said Taner Yildiz, Turkey's energy minister. "What if energy efficiency beats oil, gas and renewables? We should savour our natural resources. We shouldn't waste. It all boils down to efficiency."

The IEA's Van der Hoeven said energy efficiency measures coupled with renewables is the key to developing a sustainable energy mix. "Renewables have to be part of the energy mix. They are maturing in many parts of the world because costs are coming down," she said.

Van der Hoeven added that continued government subsidies for fossil fuels were one of the biggest hindrances to the expansion of renewable energy. In 2011 global subsidies for renewable energy amounted to $66bn. This is compared to fossil fuel subsidies of $520bn in 2011, a 22% increase year-on-year. "If you really want to do something about renewables do something about subsidies for fossil fuels," Van der Hoeven said.

However, Yildiz said that pursuing an energy policy dominated by renewables was unsustainable, likening it to "walking with crutches".

Although global renewable energy capacity is expected to ramp up, fossil fuels will provide the mainstay of global energy consumption for decades to come. Because of this, it is vitally important to develop carbon capture and storage (CCS) technology alongside low-carbon energy sources, Luis Enrique Berrizbeitia, vice president of CAF development bank said. "Despite all our efforts fossil fuels will continue to dominate," Berrizbeitia said. "It's crucial we develop CCS to ensure fossil fuels will be used as intelligently as possible in the future."

WEC has developed an energy sustainability index which ranks 129 countries in terms of how sustainable their energy policies are. Only five countries received the top AAA rating: Switzerland, Denmark, Sweden, the UK and Spain.

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